Gazprom Firms up Export Plans
Following Gazprom's ruble 41.2bn ($625mn) deal with domestic firm, Zagorsk Pipe Plant, to supply 50,000 metric tons of large-diameter pipe by April 2021 for the Power of Siberia pipeline, the company announced November 21 that it is to expand its exports of both pipeline gas and LNG.
The 3,000-km Power of Siberia pipeline is expected to start up in December 2019 and ramp up deliveries to China to reach its contracted 38bn m3/yr over several years. Gazprom has marginally cut its 2018 investment in this project to rubles 218bn ($3.31bn), but is still higher than last year’s level of rubles 158.8bn.
Gazprom said that one of the most significant developments in the energy market has been China’s newly-acquired status as the world’s largest gas importer. In the first 10 months of 2018 China imported just over 72mn mt of pipe gas and LNG, up 33.1% on the same period in 2017.
EU markets
Russian business daily, Kommersant, reported November 21 (citing sources) that Gazprom is to extend the 15.75bn m³/yr TurkStream 2 pipeline north from Turkey, via Bulgaria, to Serbia, Hungary and Slovakia.
Gazprom said that EU domestic gas production has declined, especially from the Groningen field in the Netherlands whilst demand for Russian gas has risen. The company sent 3.5% more gas by pipeline to European markets, or 171.6bn m3, in the year to November 15.
It added that, despite US attempts to take larger share in EU markets, Gazprom delivered 100 times more gas than US LNG projects in the year to October 31.
Gazprom completed its offshore TurkStream line November 19, while the NordStream 2 development is continuing to expand into EU markets.
Regarding the TurkStream 2 extension, a Bulgarian source told NGW that the European Commission agreed with the plan, while Gazprom CEO Alexei Miller visited Bulgaria in early November and discussed the issue. "All sides agree with the Bulgaria, Serbia, Hungary and Slovakia route," he added.
A separate Bulgarian source told NGW earlier that multi-billion dollar investment is required to launch this route and that this may be ready by 2022. However, Kommersant reports that Gazprom plans to begin deliveries to Bulgaria and Serbia via TS2 in 2020 and subsequently to Hungary in 2021.
Bulgartransgaz said November 8 that following the non-binding expressions of interest in this second stage, it has decided that it is necessary go ahead and implement the development and expansion project, and it has submitted October 26 the documentation for the third and binding stage of the open season to the national energy and water regulator for approval. Phase 3 bidding is planned both to begin and end in December.
Kommersant quoted sources which said that Gazprom is going to book all the proposed capacity. "Gazprom plans to deliver 15.75bn m3/yr to Bulgaria via TS2, of which 11bn m3/yr would reach Serbia. The [latter] country would purchase 2bn m3/yr and the remaining volume (9bn m3/yr) would go on to Hungary (4.7bn m3/yr) and Slovakia (4.3bn m3/yr)."
Separately to TS2, the construction of the Bulgaria-Serbia interconnector line (1.8bn m³/yr) and the Bulgaria-Romania-Hungary-Austria (BRUA) project (1.75bn m³/yr by 2019 and 4bn m³/yr by 2022) are also both on track.
Gazprom also announced November 21 that it is planning to expand its presence in the global gas market through achieving an optimal balance between pipeline and LNG supplies, working on the construction project for the Baltic LNG plant and the expansion project for the Sakhalin II plant, as well as building an LNG production, storage and shipment complex near its Portovaya compressor station.